Getting ahead of the game

We reported recently that A4e were happy to publicise the fact that they had a presence at all the party conferences this year.  The latest edition of Private Eye reveals that last year, 2012, they were there with a very specific purpose - to lobby on the Transforming Rehabilitation contracts (that's the outsourcing of the probation services).  Remember that lobbying means getting access to the decision-makers to push for the business you want.  And last year what A4e wanted was to change the contracts to reduce the initial risk carried by the private companies and reduce the penalties for missing targets.  Along with other WP providers, they asked for meetings with Ministry of Justice ministers.  A senior civil servant, Jenny Giblett, advised against this meeting.  It wouldn't look good, given the "reputational damage" suffered by A4e over the fraud allegations.  Chris Grayling and two other ministers heeded the advice.  But A4e (or their lobbyist) took advantage of the Lib Dem conference to get at Lord McNally, another minister, who agreed to a meeting.  The civil servants were in a bit of a panic, and wanted to ensure that McNally was told exactly why it was a bad idea.  But the meeting went ahead; A4e gained access ahead of its rivals.
It's not clear whether they got any advantage from this.  But it's revealing that government thought that the company was so tainted that the normal lobbyists' contacts should be avoided.

"Contractorisation"

"Contractorisation" - a hideous word coined by David Cameron when he was questioned recently by a parliamentary committee.  He was asked about Chris Grayling's statement that companies which are guilty of malpractice or gross failure could be ruled out of future contracts.  (Think Serco and G4S.)  Would this happen?  Cameron was vague, but said he was in favour of more "contractorisation".  Of course he was vague.  Because it won't happen.  For one thing it would be a legal minefield, and for another, who else is there?  He was also asked about the timetable for bringing in Universal Credit, and was equally vague, leading people to conclude that he and the government know it's not remotely on schedule, and only Iain Duncan Smith thinks it is.
With the start of the party conference season, we can see very clearly that there is consensus among the main parties about welfare and outsourcing.  Clegg waffled this morning about "making work pay" and dodged a question about the deepening poverty of those on benefits.  This is the Tory attitude as well; they believe that they have won the argument.  Tales of hardship can be brushed aside, because a majority of the electorate have accepted the propaganda.  Michael Gove caused a bit of a fuss by saying that he thought people who used food banks were just bad at managing their money.  Various Labour MPs are willing to put a different point of view, but their party would not alter anything the Tories have done.  Nor would they call a halt to the outsourcing.
Cameron, Gove, Clegg et al are not necessarily bad people.  They have good intentions towards people whose lives they cannot begin to understand.  When they are confronted with the truth they can't accept it.  And now that the economic figures aren't quite as bad as they were, they can proclaim that they were right.  It's grim.

As I was saying ......

Last week I speculated about the future of outsourcing, and pointed out some of its perils.  Now comes vindication with the story of G4S and Serco having overcharged the government massively on their contracts to tag offenders.  Because G4S is apparently not co-operating fully with the government's investigation, Chris Grayling is calling in the cops.  With new contracts in the pipeline, Serco have said they won't bid for them - but Capita plans to do so.  Unless a foreign company throws its hat in the ring, that's it.  There are no other companies in a position to bid.
We learned today that, between them, Serco and G4S get £1.5 billion a year from the may contracts like this that they have.  And in total outsourcing is worth more than £80 billion a year.  That's our money.  Some are now putting the blame for messes like the tagging contracts on the poor skills of those civil servants who are supposed to manage and monitor them.  Well, maybe, but that's inevitable.  They are hugely outgunned by the companies.

A4e and the government

The latest edition of Private Eye has shown once again the unhealthy relationship between A4e (and the other Work Programme primes) and the government.  They have documents released under FoI relating to a meeting which Chris grayling had last July with A4e directors.  At that point it was already clear, or should have been, that the WP was failing, and the publicity around A4e had been terrible.  But Grayling tells them, "In six months it will be all forgotten," and that he's grateful for what they're doing.  Grayling was replaced by Mark Hoban, who was similarly congratulatory at a meeting with Maximus in September.  The article continues: "The most revealing document, a 'short feedback' email, says Hoban wants Maximus' views on 'how we "sell" the Work Programme'."
Hoban has since made stern noises about tackling under-performance on the WP.  But, as the Eye points out, this is indicative of the fact that the government is more concerned with covering up the failures than securing value for money.
One important link with government for A4e was Jonty Olliff-Cooper, and he has gone.  The only publication to have picked up this fact is the Guardian, with a diary piece by Hugh Muir.  He points out that Cooper used to be "assistant to eccentric [Tory] strategy guru Steve Hilton".  Muir seems to be suggesting that Cooper has departed because the WP figures, due out shortly, are going to be terrible, but I wouldn't be surprised if he's clearing his path to a seat in parliament.  Nor would I be surprised if his position became untenable after his appallingly ill-judged tweets.  His going leaves one strong link between A4e and government, however.  After the meltdown last year and Emma Harrison's departure, the company hired the PR consultants Quiller, which includes George Bridges, "a pal of Chancellor George" as Muir puts it.  This was supposed to be a temporary arrangement, and Jonty confirmed that in a tweet not long ago.  But Quiller is still there.
Outsourcing by government is not a straightforward business relationship.  There are mutual interests, which are not necessarily those of the people who ultimately pay the bills - us.

The only game in town

A4e "welcomes" the new contracts to be issued by Chris Grayling for "offender rehabilitation", or so they say on their website.  These contracts will privatise a chunk of the work of the Probation Service, and they're set to be on a Payment by Results basis.  PbR is not a model the outsourcing companies like; but it seems to be the only game in town at the moment.  The Work Programme hasn't been a good advertisement for it, and Mark Hoban (more about him later) has reiterated that the worst-performing providers will be penalised by losing "up to 5%" of their new referrals.  It's hard to see that as a punishment.  The providers have complained that they have too many referrals and not enough money to do anything useful with them.  Hoban is talking tough, saying that he's willing to see providers go out of business if they can't deliver on the contracts they signed.  But if any of the big companies, including A4e, went bust it would cause big problems, as the remaining providers would be expected to pick up the business.

The Telegraph reports that Mark Hoban has been one of the biggest beneficiaries of the MPs' second homes scam.  He sold his London flat, funded partly through the MPs' expenses system, in November with a profit of £144,000.  He's only been asked to repay £11,332, because that's all that's due since the new system kicked in.  The article, somewhat tongue in cheek, ends by describing Hoban as the minister "at the forefront of trying to get more people off benefits and into work".  It really does point up the hypocrisy of politicians who milk the system while vilifying the poorest.

Two more articles I'll simply recommend without comment.  The first is in the Guardian: "Recession is a good time to exploit cheap labour, says Cameron aide".  The second, also in the Guardian, is by Nick Cohen: "Lies, damned lies and Iain Duncan Smith".

Finally, a demonstration of how the right-wing press works hand in glove with the government, this time to denigrate the BBC.  The Express has splashed an account of a book which purports to show left-wing bias in the Beeb.

Don't mention the Work Programme

Have you noticed that the Work Programme doesn't exist any more?  Up to last Autumn it was dropped into every pronouncement by Tory ministers; but after the publication of the performance data it's as if an edict has gone out saying don't, under any circumstances, mention it.  Too embarrassing.
Even today, when Chris Grayling was doing the rounds to talk about his latest brilliant idea - outsourcing the Probation Service on a payment-by-results basis - hardly any journalists brought up the failure of the WP.  Their short memories are very convenient for the politicians.  They lose interest very quickly.  Only the Telegraph has published anything about A4e's accounts.
But something must be going on behind the scenes, surely.  The providers, if not losing money, are not making any profits, and updated performance figures will have to be published sooner or later.  Who will blink first?  Will a provider pull out of the contract, or will the government pull the plug on the whole thing?  Is Mark Hoban trying to renegotiate the contracts?

It seems that there's been a backlash over the language being used about people on benefits.  The Independent is leading the way in reporting this.  Last Friday it publicised a poll commissioned by the TUC showing that "a campaign by Tory ministers is turning voters against claimants – but only because the public is being fed 'myths' about those who rely on benefits."  The article goes on: "According to YouGov, four out of 10 people think benefits are too generous and three in five believe the system has created a culture of dependency. However, people who know least about the facts are the most hostile towards claimants. More than half of those who are 'least accurate' about the system think benefits are too generous, while fewer than one in three (31 per cent) of those giving the 'most accurate' answers agree."  Today the paper reports that the Tory campaign team has been told to tone down the language.  "Mr Duncan Smith was appalled by a Tory online advert last month showing a man on a sofa, asking whether the Government should support 'hard-working families or people who won't work'".  Nice.  Apparently one Tory minister told the paper: "Some people who lose their jobs and many people on tax credits, are strivers not scroungers."  (my italics) How generous of him.  Methinks he doesn't get it.  Two of the Lib Dems, Sarah Teather and Vince Cable, are completely unequivocal that the language is wrong and damaging.

Politics

Chris Grayling has performed so well at the DWP that he has been promoted to the Cabinet as Justice Minister.  There is no word yet as to who replaces him.  Iain Duncan Smith was apparently offered the job but wanted to stay put.  So we expect no change.

No change to the Universal Credit policy, despite criticism from several sources.  The Chartered Institute of Taxation is concerned about it being "wholly impractical" for the self-employed, who will have to report their transactions every month, within 7 days of the month end.  The Federation of Small Businesses agrees.  Gingerbread, which campaigns for single-parent families, is even more worried.  They reckon that more than a million such families will lose out.  Read their findings here.

Some change (for the worse) for those who have been shifted onto ESA work-related-activity.  They will now lose up to £71 a week if they don't comply with the instructions of their "advisers".  The Guardian has an excellent article on this.    The Telegraph, however, chooses to headline its own account as "Fines for workshy sickness benefits claimants to double."

No change to the government pretending that millions forced into part-time work because they can't get full-time is a good thing.  The Express has a good article on this, which ends with a typical Grayling "everything is wonderful" quote.

But there is change - dangerous change - in the numbers of people having to depend on food banks.  There's an excellent, detailed article by Paul Mason on the BBC's website.  It shows that 43% of the people needing to turn to these food banks are there because of benefit "sanctions" or the refusal of a crisis loan; and there's a graph showing how these sanctions have spiked.

Another of those MPs who have been invited into A4e's offices has blogged about how impressed he was (scroll down the page).  He's Conservative Guto Bebb, MP for Aberconwy.  He's another who thinks that self-employment is great.  But he complains about the Welsh government (Labour, I believe) supposedly creating initiatives which are damaging the Work Programme.  Or so A4e says.  Does anyone know anything about this?

PR or results?

A4e has been on a PR offensive, described on its website.  They have invited local MPs into their offices to show them "the real work that goes on behind the headlines".  Six have so far taken up the offer.  Niki Freeman, who is described as Local Business Leader for A4e, is quoted as saying: "Some of the comments that have been made against A4e have been incredibly frustrating and hurtful for my staff and the many partners we work with, who, day in, day out, have simply been doing their jobs."  I sympathise with that.  But the piece goes on: "Over the last year, A4e has been working hard to establish an excellent team of professional staff with a range of specialist skills to support individuals across the UK. The Work Programme’s ‘black box’ approach gives service providers the freedom to create innovative ways of working, allowing A4e to tailor its service to individuals."  This is where many clients would take issue with the company.  The reactions of three of the MPs are quoted.  Two of them, Helen Wheeler of South Derbyshire and John Stevenson of Carlisle, are Conservatives and effusive.  The third, Labour's Vernon Coaker, is more guarded.  But no doubt all of them were happy to be quoted.

It makes sense to get MPs on side.  But on the Work Programme A4e, like all the other providers, will be judged on results.  After the leaked document showing very poor results, and Private Eye's publication of the letter showing that Working Links is in the same position, the Telegraph now has an email to Ingeus staff from its director Jack Sawyer.  He says that the firm is not meeting its "contractual minimums" and its performance is not good enough.  Chris Grayling's reaction is simple.  It's all getting better and anyway, "any providers which were failing to deliver could see more unemployed people referred to other welfare to work companies under the programme."  He doesn't say what will happen if they're all doing equally badly.  

More lies, and questions

It's hard to know whether Chris Grayling is deliberately making it up or just doesn't understand.  An article in the Telegraph yesterday showed the depths to which ministers, in collaboration with a Tory press, can sink when it comes to welfare reform.  The headline is "Half of recipients of sickness benefit return to work if ruled fit".  But the first sentence says that more than half "go off benefits".  Hardly the same thing.  The appalling quality of the journalism in this piece is shown by the sentence, "More than 2 billion people who previously claimed Incapacity Benefit are gradually being assessed ....."  Okay, maybe that's a typo on the website.  But don't they have proof-readers?

What the report in question actually claims to show is that 52% of those assessed as able to work don't claim another benefit straight away.  10% went back to their old jobs; 18% found new work or worked for themselves.  "Others retired or were supported by their families."  Which is not quite the same as the headline, is it?  The comments under the article are well worth reading for the intelligent analysis of this rubbish.  But it's the lies and the spin which last.  Half of those on IB should be working.

And another piece has popped up on the Telegraph's website.  Apparently Grayling has been "forced to tighten the rules ..... to get more people off benefits and back into work".  He says that he will "redesign the scheme so that those deemed originally too ill to join it would be made to do so".  It's because WP providers are "crying out" for more hard-to-help claimants, and yet only 40,000 people on ESA have been pushed onto the programme.  Well, of course WP profits depend on these "hard to help" people.  Incredible.

One of the least reported contracts which pays A4e and the like is the Jobcentre Plus Support contract (JCPSC).  Helpfully, A4e has published a piece on their website to supposedly explain what they do, in the 33 London boroughs where they are the prime contractors.  But the only description is "provides employment training for people who have signed on at Jobcentre Plus and need further support in terms of improving their job searches and getting ready for working".  All right, we understand what that means.  But this is work which should, and could, be done by the Jobcentres.  Contracting it out was a purely ideological move, handing work for profit to the private sector.  While there's no talk at the moment of privatising the Jobcentres altogether, I wonder whether this would have been done by now if the climate had been different.

Openness

Two bits of news which could, loosely, come under the heading of openness.

The Guardian reports more "chaos" around an outsourcing company which could have a bearing on the behaviour of companies like A4e.  The story is about Atos and its fitness-for-work tests.  I hadn't realised that last year claimants were given the right to record their assessments so that they could ensure that their details were correctly registered.  Thinking to save on the costs of all those appeals, the government told Atos to equip themselves with recorders.  The firm has complied by buying just 11 (that's eleven).  And most of those are broken.  Chris Grayling thinks that's okay.  However, if it's officially permitted (if very difficult) to record Atos assessments, maybe that opens the door to recording encounters with other companies which can have a very damaging impact on clients' lives.

The Exaro site reports that the Public Accounts Committee is demanding greater openness in outsourced public services contracts.  They want "all data" disclosing, and for the companies (and charities) to be subject to the Freedom of Information Act.  At the moment all the stuff we should know is covered by "commercial confidentiality".  The PAC's Chair, Margaret Hodge, cites the current G4S fiasco, and the fact that we don't know what penalty clauses were in the contract.  While some MPs and civil servants like the idea, I'm doubtful whether this will get anywhere.  There are simply too many vested interests.

Going under

News has emerged that a sub-contractor of A4e has gone out of business, unable to keep going under the Work Programme.  The Guardian has the story of the demise of Eco Actif, a social enterprise in the chain of providers under A4e.  The boss of the company, Amanda Palmer-Roye, was a political supporter of the government, but found that the payment system for the WP was impossible to live with; the firm couldn't get finance from the banks, which regard the WP as too "high-risk" and, she said, "its association with A4e had been a matter of great concern to potential investors".  Eco Actif had other contracts; a specialist programme subcontracting to A4e, G4S and CDG for support to ex-offenders, which had not come up with a single referral; and one of those European Social Fund contracts for workless families.  But now they've gone into liquidation.  All this is of interest in the light of the Merlin assessment for A4e.  This is the DWP's arrangement for monitoring how the primes are treating their sub-contractors, and A4e had their inspection recently.  They scored an overall 70%.

All the optimism from Grayling about the Work Programme seems curious in light of new estimates for the number of people being put on it.  As the This is Money website puts it, "More than half a million potential recruits seem to have disappeared" from the scheme.  For Labour, this is an opportunity to shout about "chaos", and warn that jobs would be lost in the W2W industry.  It's very hard to give any credibility to Liam Byrne on this, when the WP is just an extension of Labour's own programmes.  But the ERSA, the trade body for the industry, is also very annoyed about the staffing difficulties that the wrong estimates create.

Reaction to the figures

There hasn't been much reaction to to those figures released yesterday.  The Guardian has a long piece which airs the arguments about what the figures mean.  They put to Grayling the point that the companies had "creamed off" the easiest groups, but he says they didn't.  A couple of industry websites summarise the press release, which is what the government obviously wanted - a bald heading that 25% were off benefits after 36 weeks.


Channel 4 News' Factcheck blog does a reasonable job of analysis.  They point out that the non-intervention rate (the numbers who would get work anyway) was supposed to be 28%, so a current figure of 24% is hardly brilliant.  And, as they say, it's not even a figure for those who've found work, because people sign off for a variety of reasons.  They point to ONS figures that show that in the last 3 months only 46% of those who left JSA actually went into work.  


The political left naturally chooses to focus on the fact that the number of people out of work for two years has more than doubled under the current government.  Left Foot Forward uses this to show that the WP is failing.


No one, apparently, can remember as far back as privatised New Deal (2006 - 2009), where the providers promised 50% job outcomes and delivered around 24%.  Strange coincidence.  But the WP was supposed to give the providers the ultimate incentive - payment by results.  It's not working, is it?

Work Programme figures

The DWP has published figures intended to show how well the WP is doing.  You can find the release here.


The Independent has picked it up as "Chris Grayling hails employment programme".  It says that the figures show that "around one in four of those who joined the Work Programme a year ago had stayed off benefits for at least three successive months.  The signs were that the figure could have risen to 30%, which means the multi-billion pound scheme was 'on track' to deliver the help ministers had hoped for."



Look at the figures for yourself.  We're told that "Of those who left benefits most quickly - in the first 10 weeks - 7 out of 10 were still off benefits 13 weeks later."  No surprise there.  They were the ones who would have got work anyway.
It's being spun as 25% getting long-term work.  It doesn't mean that.  Of the 26,800 sample size, people will have signed off for a variety of reasons, including death, emigration and marriage.
There is no breakdown by region or by provider.  And how does this square with the leaked A4e performance figures which showed little more than a tenth of these figures?


PS:  In answer to some of the comments below, I've been given the following information:

1. The Office for National Statistics say that 46% moved into jobs of more than 16 hours a week.  That suggests that there's rather more sharing of information going on than some people would like.
2. The DWP says "categorically" that the numbers signing off do NOT include those who were sanctioned.

Interesting.

They want more sanctions!

A fascinating piece in the Observer reports that "Private firms on payment-by-result contracts have suggested more punishments should have been meted out".  In 2009, 139,000 people had their incomes stopped.  By 2011 it was more than 500,000.  And yet Corporate Watch has documents which show that the companies want more.  In the first 8 months of the Work Programme, jobcentres stopped benefits for 40,000 people, but that was only about a third of the 110,000 that were referred to them.  The rate, however, is going up.  The document shows that Working Links refers the most cases, but A4e is second.  It requested sanctions in 10,120 cases.  3,000 of these were accepted by the jobcentres.  
The procedure in A4e's case, I'm told, is that offices send the cases of non-compliance through to a central office, along with the reasons for this non-compliance (didn't turn up but was in hospital, that kind of thing); that office then refers them for sanctions.  But regularly the explanations get left off, so people find their income has been stopped when they've been told that wouldn't happen.
The article goes on: Richard Whittell from Corporate Watch said the Work Programme appeared to be focused on slashing benefit rather than putting people into work. "These figures give the lie to the government's claims its welfare reforms are about helping people into work," he said.   " By the time it's finished, more people will have been sanctioned by the Work Programme than properly employed through it. Every month thousands of people are having their only source of income stopped and being pushed into hardship. Companies like Serco, Working Links and G4S may not be very good at finding people suitable work, but they're dab hands at punishing them." The private firms say they make their referrals to job centres in line with government guidelines.
Chris Grayling is quoted as saying that "there was no financial imperative for private firms to punish jobseekers".  So why are they doing it?  Is it the case that increasing numbers of people are refusing to comply with the terms of the WP?  Or is there some other reason?

Going up

The news today is that unemployment is slightly down but the number claiming benefits is up.  There's a good analysis in the Independent.  Not even Chris Grayling can see much encouragement in the figures.  And, unusually, he doesn't try to cite the Work Programme as the solution.   One of the union leaders, Dave Prentis, points out that, "The number of people unemployed for more than two years continues to rise. We know that the longer someone is out of work, the more difficult it is to get back into it."
 The BBC this morning (Today on R4) followed 8 people who were put out of work when a shop closed.  5 of them are still unemployed months later, and aware that time is running out for them.  What a pity that the crisis around A4e scuppered the BBC's plans to follow a number of clients at A4e's Liverpool office.  (See my 8 Feb post.)  It was a project which began in November 2011, but presumably had to be killed.  The fact is that the Work Programme isn't working.

Redefining failure

One of the great advantages to government of flogging off public services is that the politicians are then not accountable.  Information is refused because it is "commercially sensitive".  Even at local council level, the taxpayers and the service users (and even councillors) are told that the details of contracts are none of their business.  The debacle over A4e highlighted the problems with this situation.  But for this government the Work Programme leaves them nowhere to hide.


Iain Duncan Smith spent years in opposition developing his theories on welfare.  Being in government has brought him face to face with reality.  But he can't afford for his theories to be proved wrong.  So, along with the imperturbable Chris Grayling, he has to insist, against all the evidence, that the Work Programme is proving a rip-roaring success.  The government can't afford for it to fail; it is the model for all future privatisation.  And if that means redefining failure as success, they'll do it.  The contracts, we are told, are strictly "payment by results".  But that isn't true.  The companies insisted on "attachment fees", an upfront payment for each starter.  Someone on the MyLegal website has analysed the finances and shown that A4e must already have received £25.3 million in attachment fees alone.  And if they are achieving only 10% job outcomes they are likely to have been paid around £32.8 million for getting 6,300 people into work.  But the dead weight figure (those who would have got work without any intervention) is reckoned to be around 25%.  When the government is finally obliged to publish figures it will be interesting to see how they get round that.  Then there's the fact that the contracts were supposed to involve small, local and charity organisations; but 28 of these have already dropped out, unable to make it pay.


What does increased "Mandatory Work Activity" do to the availability of actual jobs?  Never mind, there are plenty of jobs out there.  IDS, Grayling and other ministers trot out figures for the number of vacancies which bear an increasingly tenuous relationship with reality.  On 14 June IDS claimed that 500,000 new jobs are being added to Jobcentres every week.  The FullFact website has shown that this is simply not true.  JCP reckons it's about 10,000 a day; but any jobseeker knows that this doesn't reflect genuine job vacancies.


So annoyed is Iain Duncan Smith by the refusal of the real world to conform to his theories that he is increasingly blaming the poor for their poverty.  There's nothing new in that for the right wing of politics.  

Round-up of an interesting week

It began on Monday when the Guardian leaked details of the evidence due to be given to the Public Accounts Committee the following day.  They got it slightly wrong.  There were not two whistle-blowers, just the one.

On Tuesday the PAC met.  The Tory members of the committee insisted that the whistle-blower's evidence be held in private.  Somebody went straight to the Telegraph afterwards and gave an account of what had transpired.  This was published on 23 May.  The next day the Telegraph put the whole document containing the evidence given by Eddie Hutchinson on line.

The media used words like "damning" and "shocking" to describe what Mr Hutchinson said, and focussed on A4e.  Essentially, the culture at the company was such that fraud was inevitable and not dealt with properly.  

The government's reaction was confused but angry.  Chris Grayling appeared immediately to accept A4e's line that the allegations were "unfounded and untrue" and that Hutchinson was not a credible witness.  We were left to assume that he was an embittered sacked employee - the usual characterisation of whistle-blowers.  But Grayling's response always skated over the internal A4e report, produced before Hutchinson ever joined the company, which told a similar story.  In any case, it all happened under the old contracts and couldn't happen now.  He even demanded that former Labour ministers release secret papers showing what they knew about fraud at A4e.  But, "We have audited our current contracts with A4e and found no evidence of fraud."  Interestingly, he threw in that it was Ernst and Young which did the audit.  As one of our correspondents pointed out, Ernst and Young part owns Working Links.  Might as well keep it in the family.
I was reminded of an investigation for which I was responsible a few years ago.  The person drafting the report wanted to put, "There was no evidence ...."  I changed it to, "We found no evidence ..."  Quite different.
So where are we now?  The government wants to say that it never happened but if it did it was Labour's fault.  And Hutchinson isn't tellling the truth.  Whatever the PAC says has been rubbished in advance.  The other primes can be relieved that all the attention is on A4e.  The current contracts are fraud-proof, so that's all right.  But now we hear that Meg Hillier MP (left) is calling for "greater openness and transparency" over all such contracts.  The SundayTelegraph today reports the MP, who sits on the PAC, as saying: "A4e is one of a number of companies receiving its only income from the public sector, but we can't follow the public tax pound. It's public money paying for a public service commissioned by the Government. Why would you want to hide anything?"  She added that a good organisation would have nothing to hide.  Public companies are accountable to their investors, so taxpayers should have a right "to know how publicly-funded firms made a profit and should have a say over how companies operate, including how much executives are paid."  We agree.

None of that can change the fact that the Work Programme is floundering.  The best that the government can do is expand its work-for-free programme (see the Observer).   When in a hole stop digging, they say.  But the DWP keeps on digging.

Grayling on Newsnight

Okay, I take it back.  The BBC did tackle the A4e fraud question on Newsnight last night.  If you missed it (as I did) you can catch up on iplayer here 25 minutes in.  Paul Mason summarised Eddie Hutchinson's evidence, picking out all the juicy bits.  He then showed the 2009 internal A4e report which, he said, they had handed to the DWP only to be told that they weren't interested because they were concentrating on current programmes.  Mason said that Hutchinson had been surprised to learn of this report.  (He joined the company the following year.)
Emily Maitliss then interviewed Chris Grayling.  She wasn't sufficiently clued up about the contracts, but the main points got across.  Grayling insisted that the allegations were not about the Work Programme, and that the detailed investigation done by the DWP's audit team and Ernst & Young had found no evidence of systemic fraud.
Maitliss tried the obvious questions.  Is A4e a fit and proper company?  If this was a fraudulent benefits claimant he would be "down on them like a ton of bricks".  Grayling stonewalled, but said that there were "significant doubts" about the evidence and "significant doubts" about Eddie Hutchinson.
So the strategy is clear.  Suggest that Hutchinson is a liar.

Grayling virtually calls Hutchinson a liar

There is no doubt whatever over which side Chris Grayling is on.  On Channel 4 News tonight he said that there are "serious question marks about how substantial and how correct the evidence ... is; serious potential misunderstandings."  The evidence, of course, is that which Eddie Hutchinson gave to the Public Accounts Committee about what he'd found at A4e.  But Grayling insists, "We haven't found fraud at A4e," after the investigation by Ernst & Young.  And now he's attacking the PAC, accusing them of not disclosing this evidence until the meeting, when it should have gone to those conducting the audit for the DWP.  Says Channel 4 News, "Mr Duncan Smith's letter continued: 'I can only reach the conclusion that the committee has held back details from the DWP in order to generate media coverage.'"  

Margaret Hodge says that she's very upset about the leak to the Telegraph and will launch an enquiry.  The initial Telegraph story suggested that the paper had simply spoken to someone who was there at the meeting.  The subsequent publication of the document containing his evidence must have a similar source; it's annotated, as if it's one of those copies handed out to committee members.  


With Grayling's colours pinned firmly to the mast, Hutchinson is now being portrayed as a liar.  Perhaps A4e will try to paint him as an embitterd ex-employee who failed in his job.  How can the rest of us know who's right?  There's one point which might clarify matters.  Hutchinson didn't join A4e until 2010.  It was a year before that when A4e compiled its own internal report which showed serious fraud and potential fraud.  So was that seriously incorrect as well?

If you get all your news from the BBC you wouldn't know anything about this.  As usual, they are pretending it hasn't happened.

Fraud and lap-dancing

The Exaro website has got hold of the leaked internal A4e report of 2009 which demonstrated that the company knew that more than a quarter of its job outcome claims were potentially fraudulent.  This has already been publicised by the BBC's Paul Mason, but it's salutary to remind ourselves that Grayling claims that there was "no evidence of fraud" in A4e contracts.  Exaro also has what it calls a "shock discovery" - an instance of this potential fraud in the report.  "The Bootle office of A4e sent the job-seeker to work at ‘X In The City’, a Liverpool lap-dance club favoured by football stars."  If you're not acquainted with what goes on in such places, we read that, "The bar advertises lap dances at £5 a time, and offers a ‘VIP’ deal in private rooms where a half-hour lap dance with champagne costs £50."  The auditors found that "a jobseeker was working at the club for more than 16 hours a week for 13 weeks in 2009."  But they couldn't verify the job placement because the club wasn't open during working hours!
There will be some of you thinking, why not?  It's a job.  And actually, at the time no rules were being broken.  But they wouldn't be allowed to do it now.  Said the DWP, "The secretary of state, Chris Grayling, issued a ban on job centres carrying advertisements for jobs in sex clubs and sex shops. Therefore, we are hardly likely to sanction a job provider placing a person in a sex or lap-dance club. It would be banned."